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As a newcomer to school fundraising here in Australia, I’ve been surprised that schools are so limited in what donations qualify as tax-deductible.
Perhaps I’m missing something fundamental, but I struggle to understand why it is that universities and colleges are automatically considered as DGRs in their entirety, but schools are not? And how is it that the DGR categories that are open to schools include some subject areas (eg ethics, religious instruction), but gifts to support music, art, history, STEM, PE, wellbeing programs etc are not considered as sufficiently charitable to be tax-deductible?
If there’s a robust, rationale explanation for these limitations I would love to hear, so I can stop feeling grumpy about it!
Or if this is just a quirk in policy that’s arisen through history, politics and/or poor drafting, that would be interesting to know… on the basis that, if there is sufficient collective will, we might seek to get the rules cleaned up and simplified, as they are for universities.
Any thoughts would be very welcome. Thanks!
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Good to see the announcement that “Educate Plus, in partnership with AHISA and ASBA, has submitted a request to the Government for DGR guidelines for tax deductible donations to be altered to provide a ‘Student Hardship’ Fund which could receive tax deductible donations to support families in need and keep their children in their current independent schools.”
Whilst we await the results of that request, I’ve had further legal advice that we can accept tax-deductible donations for fee relief via our Scholarships Fund, through an appropriately worded Bursary charter. We have a draft Charter under review and I will provide an update once we know that is definitely okay legally, and also acceptable to our Governors.
I have also been advised from other sources that – separate to this request – there is lobbying underway to simplify DGR for schools, to unify the separate Scholarships, Capital, and Library Funds into a single DGR Fund. Presumably if the Educate Plus submission is successful, the Hardship Fund would be rolled in too.
Incidentally, I understand that the proposal would also allow for the new unified fund to incorporate provisions equivalent to those of a Necessitous Circumstances Fund (to allow tax-deductible donations to assist, for example, alumni who have fallen on hard times). However, I’m not sure how that would sit with the Education Act 83C requirement that all expenditure be directly related to the school’s normal operations.
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Hi Paul
Great to hear from you. Yes this does seem strange that the rules that apply to Universities do not apply to schools. As you have seen we are working on this as we speak.
Students in non-Government schools make up almost 40% of pupils in Australia, so the impact of significant movement of students from our sector would have a substantial impact on education in our country. Those from independent schools have identified that in normal circumstances the lag factor in fee collection and distribution could be up to one term, but in this economic crisis will be extended. The reality is profound for many of these families who have both parents working and are already make huge sacrifices to afford fees. The economic impact of the pandemic especially on rural boarding families and those from regional communities will mean that for some families their children will join the already straining government school system.
Let’s hope we can make some progress. Tomorrow we are asking all members to share my letter with their Heads and encourage them to ask their Head to lobby their local MP.
Regards Neil McWhannell CEO Educate Plus -
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